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HMRC internal manual

VAT Food

Excepted items: Confectionery: Treatment of particular products: Fruit products

Sweetened dried fruit Business Brief 18/98 announced the results of a review of the liability of sweetened dried fruit. We stated that sweetened dried fruit sold as suitable for both snacking and home baking could be zero-rated irrespective of bag size. However, sweetened dried fruit sold as confectionery remained standard-rated.

If the overwhelming impression given by the packaging and display is that the product is intended for confectionery / snacking, we will regard it as held out for sale for that purpose and standard-rated - even if there is small print saying it is suitable for home baking.

If the product is held out for sale for picnics or lunchboxes, it is held out for sale for confectionery / snacking and standard-rated.

You should also the section on dried fruit below, which refers to fruit bars.

Other fruit products The law and departmental policy relating to fruit is intended to distinguish fruit products which are for culinary use (zero-rated) from confectionery items (standard-rated). The law refers to

drained (with the exception of cherries), glacé and crystallised fruits as falling within the term confectionery.

The following examples are not exhaustive of the processes used to make standard-rated confectionery involving fruit. Fruit prepared in other ways that results in it meeting the criteria to be confectionery will also be standard-rated.

  • Drained fruit is prepared by using a syrup which does not crystallise on exposure to the air. After impregnation with sugar, the excess syrup is drained off, leaving the product sticky to the touch. These are standard-rated.
  • Glacé fruit is obtained by dipping the drained product into a sucrose syrup which dries as a thin shiny coating. It is standard-rated.
  • Crystallised fruit is prepared by allowing a sucrose syrup to penetrate into the product so that on drying, it forms crystals on the surface or through the product. It is standard-rated.
  • Drained cherries and candied peels: Fruit prepared by these means is generally sold to be eaten with the fingers in the same way as confectionery, and is standard- rated. However drained cherries (often misdescribed as glacé) and candied peels are used in cooking rather than as confectionery and so are zero-rated by items 2 and 3 of the items overriding the exceptions.
  • Cocktail cherries (maraschino) are drained and therefore zero-rated.
  • Dried fruit

Dried fruit that is naturally sweet and has no sweetening matter added is zero-rated as it will not fall within the definition of confectionery.

However, fruit pulps, juices, pastes and dried fruit formed into processed bars of dried fruit are considered to be confectionery and accordingly are standard-rated. HMRC argued this before the Tribunal in the case of Premier Foods (V.20072). Whilst the Tribunal decided in favour of the appellant, HMRC appealed and the High Court ([2007] EWHC 3134 (Ch)) agreed with HMRC, finding that an error of law was made by the Tribunal. Crucially, the High Court agreed that the Tribunal should not have relied upon the definition of confectionery used in the 1968 Popcorn House [1968] 3 All ER 782.

HMRC’s stance on such bars is also supported by the designation of such fruit bars as confectionery by the School Food Trust.

The Premier Foods decision was remitted back to the Tribunal but no subsequent appeal was made. HMRC maintain that such fruit bars are items of confectionery and are therefore standard-rated regardless of whether they are sweetened or not (by using dried fruit as the majority ingredient, they are naturally very high in sugar – for example, the bars in the Premier Foods case ranged between 55-60% sugar content).

  • Toffee apples: Following the judgement in the case of Candy Maid Confections (1968 3 All ER p776) concerning purchase tax on confectionery, toffee apples are accepted as a zero-rated food. The zero rate continues to apply to toffee apples and apples on a stick covered in, for example, chocolate, nuts etc.